Dollars and Sense

Each of us assigns different values to different things and our behaviors follow accordingly. This is one of the major reasons why it is nearly impossible to “convince” someone of the value of your products or ideas based on rational arguments and tangible benefits. It’s the ol’ Ferrari and Honda Odyssey debate again. Designer jean companies (or my

Money is a perfectly legitimate measurement of goods sold or services rendered. But it is no calculation of value. Just because somebody makes a lot of money does not mean that he necessarily provides a lot of value. Likewise, just because somebody makes a little money does not necessarily mean he provides only a little value. Simply by measuring t

It’s also why people prefer subscriptions to piecemeal payments and why they pay restaurant checks with credit cards even when they have enough cash to cover (the ethereal depletion of funds carries a lower mental transaction cost than the physical depletion).

If the answer is that we want the thing for the social, economic, or psychological benefits of possessing something rare, then, fine; scarcity pressures will give us a good indication of how much we would want to pay for it—the less available it is, the more valuable to us it will be. But very often we don’t want a thing purely for the sake of owni